15 November, 2022
From Global Worker
no 2 November 2022
Theme: Just Transition and the energy sector
Text: Cherisse Gasana
Why a Just Transition Initiative for the energy sector now?
The energy sector plays a critical role in national, regional and global economies. National and international energy companies have provided millions of organized jobs in the past and energy sector revenues are key for national budgets.
Geopolitical conflicts, growing instability, strategic competition, and security threats have made some countries reassess their energy systems; from importing fossil fuels to speeding up growth of all forms of clean energy. Energy security is a critical issue that, combined with climate concerns, is accelerating efforts to develop clean energy with secure and domestic supply chains.
According to the International Energy Agency (IEA), the energy sector employs about 65 million people worldwide (around two per cent of the global formal workforce) in
- fossil fuels (coal, oil, gas)
- the power sector (grids, transmission, generators)
- end uses (equipment, buildings, vehicles)
Although clean energy is fueling employment growth, job losses are acute in certain regions and sectors. A lot of investment is needed to ensure a good transition. Rapid employment growth also represents risks: more skilled workers needed, growing skills gaps, and insufficient focus on decent work.
While projections show significant growth in jobs in a transition to clean energy, no single clean energy technology or activity will involve as many jobs, and as many quality jobs, as workers have in today’s oil and gas sector. While today’s jobs in oil and gas are among the best jobs in the economy, so far jobs in new clean energy companies are often lower quality than fossil fuel jobs, with some employers hostile to unions.
In 2022, the International Trade Union Confederation (ITUC), LO Norway and IndustriALL Global Union collaborated on a global union initiative on Just Transition in the Energy Sector. The initiative aims to ensure that the union movement has the information, tools, and plans to get good jobs and Just Transition for energy workers.
The initiative provides a table for unions around the world to exchange information, examples and strategies. It is an opportunity to listen to experts on the renewable technologies that are set to replace and create jobs in the energy sector. It has also explored the potential for a new, tripartite process led by the UN and focused on Just Transition in the energy sector, starting with oil and gas.
A Just Transition leaves no one behind
Just Transition is a term coined by the trade union movement, referring to policy needed to secure workers' rights and livelihoods when economies shift to sustainable production. The goal is that the transition must be as fair and inclusive as possible, creating decent work opportunities and leaving no one behind.
The pandemic and the energy crisis have propelled Just Transition to one of the most important priorities, accelerating the need for unions to have a seat at the table before industries shift with only the interests of governments and capital.
Many countries have plans to invest in clean energy transition technologies, but there is no guarantee that a move to these technologies will keep and create good jobs. Companies unilaterally invest in energy transition, leaving workers out of the process, but are not investing enough to attain the commitments set by the Paris Agreement.
“Trade unions are not satisfied with efforts by energy companies so far. Existing collective bargaining, climate target-setting, and responsible business initiatives are not getting enough results,”
says Diana Junqera Curiel, IndustriALL energy sector and Just Transition director.
Lives and livelihoods at stake
What does Just Transition mean for the refinery engineer in the US set to lose his job next month, as the refinery will close?
What does Just Transition mean for the gas extraction engineer in Denmark who has just found out about the cancellation of latest round of gas extraction licensing due to government climate goals?
Workers in fossil fuel industries are often portrayed as resistant to clean energy, but the resistance is more often driven by uncertainty about what happens to traditional energy jobs. Climate change has a direct impact on communities and on workers’ livelihoods in these communities.
Supply chains are crucial to Just Transition
“Unions must be present on the ground, on national and on international levels to make sure that Just Transition is dealt with not only in the global north, but throughout the supply chain,”
says Anne-Beth Skrede, LO Norway special advisor.
Global unions represent workers throughout the supply chain, and building climate resilience into supply chains requires that workers be involved, especially if no one is to be left behind.
Clean energy technologies fuel employment growth
There is no single industry that could replace the oil and gas industry in terms of jobs and income. Unions are studying multiple technologies when discussing about where jobs are moving to. The Just Transition and the Energy Sector initiative looked specifically at
Breaking down the value chains from production, processing, distribution, and end use (upstream, midstream, downstream) provides a clearer view of where the jobs are and where there is a future for workers in renewable energy technologies.
Workers in fossil fuel extraction are highly skilled, with skills applicable to the growing renewable sectors. This is particularly true in oil and gas, where there is transferability and real potential for unions to tap into.
A gender transformative and inclusive Just Transition
Gender balance is poor in the renewables sector, with women representing only 30 per cent of the workforce due to gender stereotypes, lack of access to jobs, education, hiring practices, discriminatory workplace policies and a lack of work-life balance. Strategies and programmes addressing the effects of climate change must include the participation, experiences, and voices of women.
Unions must address cultural and social norms, as well as structural barriers that stand in the way of gender equality. The gender pay gap and the undervaluation of women’s work are still lacking from conversations on Just Transition.
Trade unions need to build power and alliances with civil society – feminist, youth, communities, racialized, indigenous and environmental organizations. Unions must ensure that their structures are representative of the entire workforce they represent, not only the male workers. All workers must benefit from equal opportunities and equal treatment. They must also defend the rights of the communities they are part of and integrate them in the planning of a Just transition.
What does a successful Just Transition look like for workers? Trade unions must ask if a successful outcome only benefits male workers. Have women, disproportionally under-represented in male dominated sectors like energy, been considered. What about racialized or indigenous workers over represented in precarious and outsourced work?
“Clean energy jobs are for everyone. The next phase of the Just Transition initiative plans to include gender and racial justice issues to a greater extent and explore what the union movement can do to make sure more women, racialized and young workers get good jobs in clean energy and most importantly, join unions,”
said Samantha Smith, ITUC Just Transition Center director.
Just Transition needs unions at the table!
Energy sector unions and national confederations have mobilized on the issue of good jobs and Just Transition. Their members are experiencing both changes to jobs and job losses, as well as new organizing opportunities due to decarbonization.
Good examples of Just Transition are usually found in countries with high union membership and where unions have been involved early on. Therefore, unions must make sure that they are prepared. Inclusivity and taking advantage of organizing the new jobs that the transition brings is key for achieving a successful Just Transition for all workers.
Workforces across the world face different challenges and there are significant gaps in the industrial capabilities between country’s different transition pathways. It is a messy and complex picture withno one size fits all when dealing with a Just Transition.
Though many jobs in the oil and gas sector have high skills transfer to clean energy jobs, this is not universally true. The transition will require skilling and reskilling. Similarly, newer technologies such as hydrogen raise new health and safety issues that will require new OHS regulations and skills. Even older technologies, like solar panels require more attention to skills and OHS, as there is currently not enough focus on risks such as falls and high voltages.
Workers are present throughout supply chains – unions and organized workers will ensure that there is justice in this transition
Renewable energy has pushed businesses to transform their operations and supply chains to meet record demands for clean energy. But the renewable energy sector supply chain especially the solar, wind and battery ones, face criticism over human rights violations. Legislation is developing quickly as a response.
Companies have a significant role to play in Just Transition; they can no longer make surface changes, they have a duty to make real efforts to achieve sustainability goals, and simply not cosmetic changes to tick Environmental and Social Governance (ESG) criteria check boxes.
Due diligence is discussed on national and international levels – from the European Commission’s proposed a Directive on Corporate Sustainable Due Diligence, and discussions on a UN Treaty on Business and Human Rights, to Japan’s Council of Metalworkers’ (JCM) guide on Trade unions’ role and responses to human rights due diligence, submitted to the parliamentary vice-minister of economy, trade and industry (METI).
The most advanced due diligence initiative that we have seen so far is the German supply chain legislation, the Lieferkettengesetz. From 1 January 2023, workers and their advocates will be able to sue German companies in German courts for environmental and human rights breaches, including breaches of workers’ rights.
A successful Just Transition includes taking responsibility for supply chains and human rights due diligence laws will be instrumental. Workers need to be involved to make sure that due diligence doesn’t fall short of expectations.
Just Transition agreements between unions, employers and led by the UN has the potential to get and enforce global decent jobs and Just Transition agreements between oil and gas companies and trade unions. If successful, global unions plan to expand to include other energy and industrial companies.
These developments have created a moment in time where unions have an opportunity to build the table that we will sit at.
If businesses fail to implement due diligence measures throughout their supply chains, especially in the renewables sectors there will likely be consequences on their business, as investors, customers and financial institutions are developing human rights-related requirements applicable to everyone that they do business with.
The joint initiative between the ITUC, LO Norway and IndustriALL comes at an important moment in time when unions must reclaim Just Transition. It cannot be hijacked by capital as a tool to tick their ESG boxes. It is ours, and to achieve it we must be at every level of the discussion because workers are in every level of the supply chain.
Overview of what is happening globally around Just Transition
The Inflation Reduction Act (IRA) in the USAaims to create clean energy jobs, drive investment in renewable energy, revitalize the manufacturing sector and lower health care costs. The act is projected to create 1.5 million jobs in construction and manufacturing sectors. There are still concerns around the transition itself. There are still no provisions for workers in the fossil fuel industries. The act has its limitations and unions will continue to fight for those workers.
Denmark has a highly unionized workforce that have managed to secure quality jobs in the wind sector.
The industry’s equipment manufacturing footprint is a big factor affecting where jobs are created. It determines a country’s ability to establish a strong local domestic supply chain and the ability to implement and to upgrade and update power grids to feed wind electricity into the grid.
In Norway, eleven offshore floating wind installations will be developed with employers, governments, and unions. These will be the first floating wind facilities powering offshore oil and gas installations. As oil and gas production emissions represent a quarter of Norway’s CO2 emissions, it was important for Norway to electrify these platforms.
Spain's Just Transition strategy for the energy sector is part of a larger decarbonization effort for the whole economy. Social dialogue is a big part of this process and unions are closely involved. Unions report a complex yet positive start to the process, which started with a coal phaseout and a rapid build-up of renewable energy and in 2021 expanded to include a ban on new oil and gas drilling.
In Brazil there has been an increase in prices and demand in the solar photovoltaic sector since 2021, creating about 151,000 jobs, 43% of those jobs are outside of Brazil, and the jobs are concentrated in construction and characterized by precarious working conditions and low wages in Brazil.
Energy transition in Brazil is at a critical moment. Presidential election results will have a considerable impact on the country’s direction for Just Transition.
In South Africa unions have developed a Just Transition Blueprint for Workers for the coal-energy value chain, agriculture, and transport. The Blueprint provides policy, collective bargaining, and other tools for unions to ensure that workers can drive the agenda of a radical transformation of the economy. South Africa’s energy mix going forward is under discussion after recent announcements by the government. There will be more renewables, and potentially a greater role for natural gas.
Japan has an ambitious roadmap to tackle climate change. Cooperation between unions and the government is strong. With tight electricity supply and high natural gas prices, the government and unions see roles for solar power and nuclear energy. To maintain security of supply, the Japanese government is looking for natural gas suppliers.
In Colombia, the mining industry has seen difficult times in the country. Glencore for example, took advantage of the previous government’s softer regulation to dismiss workers.
Workers want to move towards clean energy. With the newly elected government unionsbelieve that they can make progress on a Just Transition, not only in the energy sector but in other sectors as well, like agriculture.
In Iraq transition plans and investment have come to a halt due to instability in the country. There is opportunity for renewable energy in Iraq, yet there is flaring gas all over the country.
Unions must look at the global picture to see where multinational companies are investing, for example, the German company Siemens has signed an agreement with the Iraqi government to produce Hydrogen in the country. IndustriALL has a Global Framework Agreement with Siemens that can provide unions with leverage to demand workers participation in the transition process.
The German government came up with a hydrogen strategy in 2020 to create strong energy partnerships around the world dominated by technical details, with no worker perspective. Engaging trade unionists, works council members, and value chain experts, DGB produced their own literature on the subject. They carried out interviews with 20 different experts and produced a position paper: Trade union demands for the hydrogen economy – towards a H2 ready workforce.
In Nigeria, trade unions are part of a tripartite social dialogue process on delivering the country’s commitments to the UN climate goals, but more needs to be done especially on what unions can do collectively to have a seat at the table.
The government still invests heavily in oil and gas exploration. Oil and gas exports account for 65% of Nigeria’s national revenue. While oil jobs are below 5 per cent of direct employment, they are the best quality jobs available.
Indonesia has a net zero roadmap to phase out coal fired power by 2060. However, unions are concerned that there is no clear plan on how to reach these targets or what they mean for the 1.2 million workers in coal mining. Unions want tripartite social dialogue to shape this plan and to include discussions on the future of the oil and natural gas industries.
unions are focusing on training and upskilling to be able to prepare workers. Including Just Transition language in CBAs and educating on climate change impact is key.